A Short History of the New World Order Part II By cyberpatriot@hotmail.com Aug. 10, 1973 – David Rockefeller writes an article for the “New York Times” describing his recent visit to Red China: “Whatever the price of the Chinese Revolution, it has obviously succeeded not only in producing more efficient and dedicated administration, but also […]

Housed in a warehouse in Ica, Peru, is a collection of ancient stone tablets which carry pictures portraying advanced medical practice. They open a Pandora’s box of questions and challenge everything we have been taught about our past

Harry Papachristou and Philip Blenkinsop – Reuters June 28, 2011

Anti-austerity protests turned violent in Athens on Tuesday as the European Union warned Greek lawmakers the country faces immediate default unless they back an unpopular economic plan this week.

Hooded youths throwing stones and wielding sticks set fire to garbage bins and a telecoms truck outside parliament and riot police fired teargas to disperse them. Trade unions began a 48-hour strike against the EU/IMF-imposed measures.

Progress was meanwhile reported in talks to persuade European banks and insurers to voluntarily roll over maturing Greek debt as part of a planned second rescue package designed to give the euro zone country a breathing space.

But the EU’s top economic official, Olli Rehn, stressed that any further assistance for the debt-crippled nation hinged on parliament adopting a raft of spending cuts, tax rises and privatizations in crucial votes on Wednesday and Thursday.

“The only way to avoid immediate default is for parliament to endorse the revised economic program … They must be approved if the next tranche of financial assistance is to be released,” he said in a statement.

“To those who speculate about other options, let me say this clearly: there is no Plan B to avoid default,” Rehn said, dismissing widespread reports that Brussels was working on a fallback plan to keep Greece afloat.

The blunt alternative was underscored by Bank of England Governor Mervyn King, who told British parliamentarians that policymakers were working on ways to limit the damage from a potential default on Greece’s 340 billion euro debt pile.

“What we’re doing is to say there is sufficient concern in the market about the possibility of default for us to think about contingency plans and the consequences of this event,” King said.

He urged greater transparency about sovereign exposures to prevent a sudden, broad-based loss of confidence in European banks in the event of a Greek default, which could trigger a new credit crunch.

Trade unions promised to fill the streets of central Athens and surround parliament from Tuesday to try to prevent lawmakers approving the painful measures.

“We expect a dynamic and massive participation in the strike and the march to the center of Athens. We will have 48 hours of working people, unemployed, young people in the streets,” ADEDY public sector union leader Spyros Papaspyros told Reuters.

Some 5,000 police have been drafted in, mostly to protect the colonnaded parliament building on Syntagma Square, focal point of weeks of mass demonstrations, some modeled on the encampment of unemployed Spanish “indignados” in Madrid. By the standards of past Greek political violence, Tuesday’s clashes were relatively minor.

ROLLOVER PROGRESS

The EU and IMF have said Greece must enact both the five-year austerity plan, with 28.6 billion euros in savings, and key implementing laws for structural reforms and state asset sales to secure the next 12 billion euro slice of aid in July.

Without that, Athens would run out of money within weeks.

The premium investors charge for holding Greek and other peripheral euro zone debt rather than German bonds narrowed on news that German banks had agreed in principle to use a French proposal as a basis for negotiating private-sector participation in a Greek debt rollover.

The euro also hit a session high against the dollar, with fears of a Greek default offset by signs that European authorities and banks are making progress on a debt rollover.

Prime Minister George Papandreou’s Socialists hold a narrow majority with 155 seats in the 300-member legislature, but a handful of lawmakers have defected and others are threatening to vote against some or all of the measures, putting the outcome in doubt.

New Finance Minister Evangelos Venizelos, a PASOK party heavyweight, has tried to woo wavering backbenchers by promising a renegotiation of the balance of the program toward promoting economic growth in September.

Rehn offered some encouragement to Greece on that front, saying he would support the government’s plan to reform the tax system later this year to broaden the tax base, simplify the tax code and reduce tax rates in a fiscally neutral way.

If Greece approves the legislation, euro zone finance ministers meeting in Brussels on Sunday are likely to agree to release the next aid tranche, with the IMF following on July 5.

Attention will then switch to putting together a second rescue package for Greece of about the same magnitude as the initial 110 billion euro bailout agreed last year.

The new program would involve some 30 billion euros in private sector participation via a “voluntary” rollover of maturing debt, a similar sum from privatization revenues and an expected 55 billion euros in new official funding.

Euro zone banks and insurers are considering a French plan outlined by President Nicolas Sarkozy on Monday under which private bondholders would reinvest half of the proceeds of maturing Greek debt in new 30-year bonds paying 5.5 percent interest plus a bonus linked to Greece’s GDP growth rate.

Of the other half, 30 percent would be cashed out and 20 percent would be invested in zero-coupon AAA securities with deferred interest that might be issued or guaranteed by the euro zone rescue fund, officials and banking sources said.

French banks have the largest foreign private sector exposure to Greece, followed by Germany.

Two sources close to the negotiations told Reuters that German banks had agreed to use the “French model” as a basis for talks with the German Finance Ministry on Thursday. German Deputy Finance Minister Joerg Asmussen also called the French plan a good basis for discussions.

Standard & Poor’s said on Monday it was too soon to judge the ratings impact of the private debt rollover being put together for Greece, which it had not yet seen, but did not rule out avoiding a downgrade to default.

Asked if he could imagine a solution in which private creditors voluntarily contributed to a Greek rescue package without triggering an S&P downgrade, Moritz Kraemer, head of European sovereign ratings, told Austrian television:

“It is conceivable depending on the situation. That is why I say it is not possible at all to draw a final conclusion on this in the current situation.”

In Berlin, visiting Chinese Prime Minister Wen Jiabao said Beijing had faith in the European economy and the euro and was optimistic that Europe could overcome its temporary challenge.

As in the past, he gave a vague commitment to buying euro zone debt without specifying countries or amounts.